Value Engineering
We are all trying to reduce Project costs.
A methodology has recently been introduced: the Value Engineering.
This presentation walks you through this procedure and, most
importantly, aims at sharing cost saving items among ourselves.
2015 Herv Baron
Please contribute by sharing the cost savings that you have implemented.
Value Engineering
What is Value Engineering?
2015 Herv Baron
Value Engineering
What is Value Engineering?
A process aimed at reducing CAPEX
Equipment cost
Bulk cost
Quantities (piping, structure, concrete)
Manhours
Site Construction manhours
Construction cost
Project duration
Weight (offshore)
2015 Herv Baron
Value Engineering
What is Value Engineering?
When shall it be done?
2015 Herv Baron
Value Engineering
What is Value Engineering?
When shall it be done?
The sooner, the more impact it can have
2015 Herv Baron
Value Engineering
What is Value Engineering?
When shall it be done?
Value Engineering features
Scope
Participants
Method
2015 Herv Baron
Value Engineering
What is Value Engineering?
When shall it be done?
Value Engineering features
Scope
2015 Herv Baron
Value Engineering
What is Value Engineering?
When shall it be done?
Value Engineering features
Scope: Plot Plan, PFD, discipline
2015 Herv Baron
Value Engineering
What is Value Engineering?
When shall it be done?
Value Engineering session
Content: identify technical alternatives
Scope: Plant Layout, Process scheme, special equipment
Participants:
Engineering,
Engineering
Departments, Vendors, Sub-Contractors
Head
of
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Value Engineering
What is Value Engineering?
When shall it be done?
Value Engineering session
Scope
Participants
Method
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Value Engineering
A stepped Method
Focus on highest cost areas
Identification of the cost saving idea
2015 Herv Baron
Value Engineering
A stepped Method
Focus on highest cost areas
Identification of the cost saving idea
Key words
Reduce
Can the equipment capacity be
reduced?
Is over design justified?
Is spare required?
Is it a nice to have?
Standardize
Use existing/vendor standard
Standardize materials
Simplify
Easy to build
Is automation required?
Technology
Could another technology be applied?
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Category
Value Engineering
A stepped Method
Focus on highest cost areas
Identification of the cost saving idea
Evaluation of the idea (feasibility, impact, risk and mitigation)
Decision
Monitoring of the implementation
2015 Herv Baron
Value Engineering
What is Value Engineering?
When shall it be done?
Value Engineering features
Scope
Participants
Method
2015 Herv Baron
Examples
Value Engineering
Examples 1/2
De-packaging to remove mark-up of package vendor
Project specifications (piping class, instrument specifications): do not
apply to packages, especially utility packages, use Vendor standards
Review different types of equipment technology, e.g., for compressors,
waste heat boilers (fired or water tube?)
Review and challenge sizing criteria: Contractor self imposed?
Perform Value Engineering with Vendor: focus on most expensive item
(materials/manhours/NDE etc.)
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Value Engineering
Examples 2/2
Review if another technology exists when not very familiar, e.g., for
water treatment
ANSI centrifugal pumps instead of API for non-hydrocarbon services
Manufactuer standard instead of API for SRU air blowers
Single mechanical seals for pumps in non-hazardous fluids service
Service test in lieu of hydrotest for ASME B31.3 cat D fluids (nonflammable non-toxic + design P<10 bar).
Please share as a comment on this presentation.
2015 Herv Baron
Did you implement any other cost saving?
